3rd Amended Stockholders Agreement

Exhibit 10.2


THIRD AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
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THIRD AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (the "Agreement") dated as of March 31, 2000, by and among 3-DIMENSIONAL PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), and those stockholders of the Company whose names appear on the signature pages hereof.


W I T N E S S E T H
-------------------


WHEREAS, certain of the parties hereto have entered into that certain Amended and Restated Stockholders' Agreement by and among them, dated as of January 6, 1998 (the "Stockholders' Agreement");


WHEREAS, the Company has entered into a Series A-5 Preferred Stock Purchase Agreement, dated as of March 31, 2000 (the "Stock Purchase Agreement"), between the Company and the investors ("Investors") listed on Schedule 1 providing for the purchase by the Investors of shares of Series A-5 Preferred Stock, $.001 par value per share, of the Company, and, in connection therewith, the Company has agreed to enter into this Agreement which is Exhibit 3.2.3 of the Stock Purchase Agreement; and


WHEREAS, in connection with the Stock Purchase Agreement, the parties hereto desire to amend and restate the Stockholders' Agreement as provided for herein.


NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and undertakings hereunder and pursuant to the Stock Purchase Agreement, the parties hereto do hereby amend and restate the Stockholders' Agreement in its entirety and hereby agree as follows:


SECTION 1. Definitions.
-----------


As used in this Agreement, the following terms shall have the following respective meanings:


"Affiliate" shall mean, with respect to any specified Person, (i) any other Person which owns, directly or indirectly, individually or as part of a group (as such term is defined under the Exchange Act), greater than 50% of the voting stock or other capital interest of such specified Person or (ii) any other Person of whom greater than 50% of the voting stock is owned, directly or indirectly, individually or as part of a group (as such term is defined under the Exchange Act), by such specified Person.


"Bylaws" shall mean the Bylaws of the Company, as amended.


"Capital Stock" shall mean any (i) shares of Common Stock, Preferred Stock or any


other equity security of the Company, (ii) debt securities convertible into or exchangeable for any equity security of the Company or (iii) options, warrants or other rights to subscribe for, purchase or otherwise acquire any such equity security or debt security of the Company.


"Charter" shall mean the Certificate of Incorporation of the Company, as restated and/or amended from time to time.


"Commission" shall mean the Securities and Exchange Commission or any other Federal agency administering the Securities Act at the applicable time.


"Common Shares" shall mean the issued and outstanding shares of the Company's Common Stock.


"Common Stock" shall mean the Company's authorized Common Stock, $.001 par value.


"Equity Stock" shall have the meaning set forth in Rule 3a11-1 under the Exchange Act.


"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and any successor statute and the rules and regulations thereunder, as shall be in effect from time to time.


"Excluded Stock" shall mean (a) the Preferred Shares, (b) the Option Shares, (c) Common Stock issuable upon conversion of the Preferred Shares, (d) the Warrants issued or issuable pursuant to the Loan Agreements dated as of December 15, 1994, as amended, August 15, 1995, December 12, 1995, February 12, 1996, June 20, 1996 and September 25, 1996 between the Company and certain of the Preferred Stockholders and the Common Stock issued pursuant to the exercise thereof, (e) the Warrants issued in connection with the Master Lease Agreement entered into between the Company and Transamerica Business Credit Corporation in June 1997 and the Common Stock issued pursuant to the exercise thereof, (f) securities issued pursuant to the acquisition of another corporation, partnership, joint venture, trust or other entity by the Company by merger, consolidation, stock acquisition, reorganization, or otherwise, whereby the Company, or its stockholders of record immediately prior to the effectiveness of such transaction, directly or indirectly, own at least the majority of the voting power of such other entity or the resulting or surviving corporation immediately after such transaction and (g) securities authorized by the affirmative vote of at least 75% of the Company's Board of Directors then in office to be issued in connection with (x) bridge loan financings from institutional and/or other accredited investors or (y) corporate partnering transactions or other strategic alliances with pharmaceutical or other companies related to the Company's business.


"Family" shall include any spouse, lineal ancestor or descendant, or sibling.


"Five Percent (5%) Stockholder" shall mean any Preferred Stockholder owning (either of record or beneficially), at any time, five percent (5%) or more of the Company's then outstanding Common Shares.


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"Group" shall mean as to (a) a Preferred Stockholder that is a limited partnership, any and all of the venture capital limited partnerships now existing or hereafter arising that are "affiliates" (as defined by Rule 405 promulgated under the Securities Act), in whole or in part, of one or more general partners or of one or more general partners of a general partner of such Preferred Stockholder and any predecessor or successor partnership and any limited and general partners of any such partnership, (b) a Preferred Stockholder that is a trust, any of the beneficiaries, settlers or grantors now existing or hereafter arising of, or any Person under common control with, such trust and (c) any other Preferred Stockholder, its Affiliates.


"Holder" shall mean each Preferred Stockholder and each holder of the Warrants issued or issuable pursuant to the Loan Agreements dated as of December 15, 1994, as amended, August 15, 1995, December 12, 1995, February 12, 1996, June 20, 1996 and September 25, 1996 between the Company and certain of the Preferred Stockholders or of the Common Stock issued pursuant to the exercise thereof and each holder of the Warrants issued or issuable pursuant to the 1999 Bridge Financing Agreements dated as of November 18, 1999 between the Company and certain of the Preferred Stockholders and the Common Stock issued or to be issued pursuant to the exercise thereof.


"Initial Public Offering" shall mean the Company's initial distribution of Common Stock in an underwritten Public Offering to the general public pursuant to a registration statement filed with and declared effective by the Commission pursuant to the Securities Act resulting in gross proceeds (before underwriting commissions and offering expenses) to the Company of not less than $15 million.


"Offer" shall have the meaning set forth in Section 4(b) hereof.


"Offered Shares" shall have the meaning set forth in Section 4(a) hereof.


"Option Shares" shall mean up to 9,325,000 shares of Common Stock issued, available for issuance or subject to options, warrants or rights granted or authorized to be granted to employees and others who provide services to the Company pursuant to any Stock Plan.


"Person" shall mean and include a natural person, a corporation, a partnership, a trust, an unincorporated organization and a government or any department, agency or political subdivision thereof.


"Preferred Shares" shall mean the issued and outstanding shares of the Company's Preferred Stock.


"Preferred Stock" shall mean the Company's authorized Series A-1 Preferred Stock, $.001 par value, Series A-2 Preferred Stock, $.001 par value, Series A-3 Preferred Stock, $.001 par value, Series A-4 Preferred Stock, $.001 par value and Series A-5 Preferred Stock.


"Preferred Stockholder" shall mean (a) each Person purchasing or who has purchased


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and holds Preferred Shares of the Company and (b) any Person to whom Preferred Shares or Registrable Securities are Transferred and to whom registration rights are assigned in accordance with Section 6.10.


"Preferred Stockholder's Group" shall mean each Person purchasing or who has purchased and holds Preferred Shares from the Company, together with any member of such Person's Group.


"Pro Rata Fraction" shall have the meaning set forth in Section 4(a).


"Public Offering" shall mean a distribution of Common Stock in an underwritten public offering to be the general public pursuant to a registration statement filed with and declared effective by the Commission pursuant to the Securities Act.


"Registrable Securities" shall mean any shares of Common Stock issued or to be issued pursuant to the conversion of Preferred Shares, and any shares of Common Stock issued or to be issued pursuant to the exercise of the Warrants issued or issuable pursuant to the Loan Agreements dated as of December 15, 1994, as amended, August 15, 1995, December 12, 1995, February 12, 1995, June 20, 1996 and September 25, 1996 between the Company and certain of the Preferred Stockholders, and any Common Stock issued or to be issued pursuant to the exercise of the Warrants issued or issuable pursuant to the 1999 Bridge Financing Agreements dated as of November 18, 1999 between the Company and certain of the Preferred Stockholders.


"Securities Act" shall mean the Securities Act of 1933, as amended, and any successor statute and the rules and regulations of the Commission thereunder, as shall be in effect at the applicable time.


"Shares" shall mean and include all shares of voting capital stock of the Company now owned or hereafter acquired by any Preferred Stockholder or transferee of such Preferred Stockholder.


"Stock Plan" shall mean the Company's Equity Compensation Plan or any stock option plan for officers, directors, employees and others who render services to the Company.


"Transfer" shall include any direct or indirect sale, assignment, transfer, pledge, hypothecation or other disposition of any Shares or of any legal or beneficial interest therein.


SECTION 2. Representations.
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2.1 By the Company. The Company represents to each Preferred Stockholder
-------------- that:


(a) The execution, delivery and performance by the Company of this Agreement and all transactions contemplated in this Agreement have been duly authorized by all action required by law, its Charter, its Bylaws or otherwise.


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(b) This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms.


2.2 By the Preferred Stockholders. Each Preferred Stockholder, as to
----------------------------- itself or himself, represents to the Company and the other Preferred Stockholders that:


(a) The execution, delivery and performance by such Preferred Stockholder of this Agreement and all transactions contemplated in this Agreement have been duly authorized by all action required by law, and by the certificate of incorporation and by-laws, partnership agreement or other governing instrument of such Preferred Stockholder.


(b) This Agreement has been duly executed and delivered by such Preferred Stockholder and constitutes the legal, valid and binding obligation of such Preferred Stockholder enforceable against it or him in accordance with its terms.


SECTION 3. Legend on Shares and Notice of Transfer.
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3.1 Restrictive Legends. Each certificate evidencing Shares, and each
------------------- certificate evidencing Shares held by subsequent transferees of any such certificate, shall (unless otherwise permitted by the provisions of Section 3.2 hereof) be stamped or otherwise imprinted with a legend in substantially the following form:


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAW. ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE THIRD AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT DATED AS OF MARCH 31, 2000, AMONG 3-DIMENSIONAL
PHARMACEUTICALS, INC. AND CERTAIN OTHER SIGNATORIES THERETO. NO TRANSFER
OF SUCH SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF 3-DIMENSIONAL PHARMACEUTICALS, INC. THESE SECURITIES MAY NOT
BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS EXEMPTIONS THEREFROM ARE AVAILABLE UNDER THE SECURITIES
ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAW.


3.2 Notice of Transfer. (a) Each of the Preferred Stockholders, and any
------------------ other holder of any Shares by acceptance thereof, agrees that, prior to any Transfer of any Shares, such holder will give written notice to the Company of such holder's intention to effect such Transfer and to comply in all other respects with the provisions of this Section 3.2. Each such notice shall contain (i) a


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statement setting forth the intention of said holder's prospective transferee with respect to its retention or disposition of said Shares, and (ii) unless waived by the Company, an opinion of counsel for said holder (who may be the inside or staff counsel employed by said holder), or an opinion of counsel for the Company as to the necessity or non-necessity for registration under the Securities Act and applicable state securities laws in connection with such Transfer and stating the factual and statutory bases relied upon by counsel. The following provisions shall then apply:


(i) If in the opinion of counsel for the Company the proposed Transfer
of Shares may be effected without registration or qualification under the
Securities Act and any applicable state securities laws, then the
registered holder of such Shares shall be entitled to Transfer such Shares
in accordance with the intended method of disposition specified in the
statement delivered by said holder to the Company.


(ii) If in the opinion of counsel for the Company the proposed
Transfer of such Shares may not be effected without registration under the
Securities Act or registration or qualification under any applicable state
securities laws, the registered holder of such Shares shall not be entitled
to Transfer such Shares until the requisite registration or qualification
is effective.


(b) Each certificate evidencing the Shares issued upon such Transfer (and each certificate evidencing any balance of such Shares not transferred) shall bear the legend set forth in Section 3.1 hereof unless (i) in the opinion of counsel (reasonably acceptable to the Company) addressed to the Company the registration of future Transfers is not required by the applicable provisions of the Securities Act or applicable state securities laws; (ii) the Company shall have waived the requirement of such legend; or (iii) in the reasonable opinion of counsel to the Company, such Transfer shall have been made in connection with an effective registration statement filed pursuant to the Securities Act or in compliance with the requirements of Rule 144 or Rule 144A (or any similar or successor rule) promulgated under the Securities Act, and in compliance with applicable state securities laws.


(c) Notwithstanding the provisions of this Section 3, in the case of a Transfer by a holder to a member of such holder's Group, no such opinion of counsel shall be necessary, provided that the transferee agrees in writing to be
-------- subject to Sections 3.1 and 3.2 hereof to the same extent as if such transferee were originally a signatory to this Agreement.


SECTION 4. Rights to Purchase Additional Stock..
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(a) Except for Excluded Stock, the Preferred Stockholders shall have the right to subscribe to any and all issuances of Capital Stock of the Company ("Offered Shares"). Each Preferred Stockholder shall have the right to purchase that number of Offered Shares as shall be equal to the number of Offered Shares multiplied by a fraction, the numerator of which shall be the number of Shares then owned by such Preferred Stockholder and denominator of which shall be the aggregate number of Shares then owned by all of the Preferred Stockholders (the "Pro Rata Fraction"). For purposes of calculating the Pro Rata Fraction, each Preferred Share shall be deemed to represent the number of Common Shares into which the Preferred Share is then convertible.


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(b) In the event the Company shall propose to issue Capital Stock except for Excluded Stock, the Company shall give written notice (the "Offer") to each Preferred Stockholder, which shall set forth the number and kind or class of shares of Capital Stock proposed to be issued the terms and conditions thereof and the price therefor. Such notice shall be given at least 20 days prior to the issuance of such Capital Stock.


(c) The Offer by its term shall remain open and irrevocable for a period of 20 days from the date of its delivery to such Preferred Stockholder ("20-Day Period").


(d) The Preferred Stockholder shall evidence its acceptance of the Offer by delivering a written notice ("Notice of Acceptance"), signed by the Preferred Stockholder, setting forth the number of Offered Shares which the Preferred Stockholder elects to purchase. The Notice of Acceptance must be delivered to the Company prior to the end of the 20-Day Period.


(e) If the Preferred Stockholders do not tender Notices of Acceptance for all of the Offered Shares, the Company shall have 90 days from the expiration of the 20-Day Period to sell all or any part of the Offered Shares refused by the Preferred Stockholders to any person(s), but only upon terms and conditions which are in all material respects no more favorable to such other person(s) than those set forth in the Offer.


(f) Upon the closing of the sale of Offered Shares to any third party, each Preferred Stockholder shall purchase from the Company, and the Company shall issue and sell to such Preferred Stockholder, any Offered Shares for which such Preferred Stockholder tendered a Notice of Acceptance upon the terms specified in the Offer.


(g) In each case, any Offered Shares not purchased either by the Preferred Stockholders or by any other person in accordance with this Section 4 may not be sold or otherwise disposed of until they are again offered to the Preferred Stockholder under the procedures specified in this Section 4.


(h) If the Capital Stock to be issued by the Company is to be issued pursuant to a Public Offering, notwithstanding the time periods set forth above, the Company may require that the Preferred Stockholders make an election to either (i) commit to purchase shares of Capital Stock from the Company at the public offering price at the closing of the Public Offering or (ii) waive their rights to subscribe for additional shares of Common Stock to be issued in the Public Offering. Such election shall be made sufficiently in advance of the filing of the registration statement relating to the Public Offering as shall be reasonably requested by the Company.


(i) The rights provided by this Section 4 may be assigned by any Preferred Stockholder to any and all members of its Group, provided that all
-------- such rights of any assignee to purchase Offered Shares will be subject to receipt of appropriate representations from such assignee as reasonably requested by the Company to ensure compliance with all applicable securities laws.


SECTION 5. Reporting of Public Information Rule 144.
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(a) With a view to making available the benefits of Rule 144 under the Securities Act (or any similar or successor rule which may at any time permit the sale of Common Shares to the public without registration), at all times after ninety (90) days after any registration statement covering an offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to:


(i) make and keep public information available, as those terms are
defined in Rule 144 under the Securities Act;


(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and


(iii) furnish to each Preferred Stockholder promptly upon request a
written statement by the Company as to its compliance with the reporting
requirements of the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing
itself of Rule 144 (or any similar or successor rule).


(b) With a view to making available the benefits of Rule 144A (or any similar or successor rule), the Company shall, upon request of a Preferred Stockholder, make and keep available such information as is required pursuant to that rule.


SECTION 6. Registration Rights.
--------------------


6.1 Demand Registration Rights. Upon written request by Holders
-------------------------- representing in the aggregate at least 50% of the total number of Registrable Securities that have not been registered under the Securities Act, the Company shall use its best efforts to effect the registration under the Securities Act and registration or qualification under all applicable state securities laws of the Registrable Securities, as requested by the Holders all as provided in the following provisions of this Section 6. Holders may require the Company to effect no more than four registrations under the Securities Act, in the aggregate, upon the request of the Holders pursuant to this Section 6.1. Except as otherwise provided in Section 6.6., any registration which is not declared effective pursuant to the Securities Act and which does not remain effective as required by Section 6.5(a) below shall not constitute one of the four registrations which the Company is obligated to effect pursuant to this Section 6.1. A request by a Holder to have the Company effect the registration of Registrable Securities shall not obligate the Holder to convert them into Common Stock, whether on not the registration of the Registrable Securities shall become effective, provided that the Holder shall convert Registrable Securities into Common Stock prior to the sale of such Registrable Securities pursuant to such registration statement.


6.2 Registration Requested by Holders. Whenever the Company shall be
--------------------------------- requested, pursuant to Section 6.1 hereof, to effect the registration of any of the Registrable Securities under the Securities Act (a "Request for Registration"), the Company shall give notice of such proposed


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registration to all Holders at least 60 days before the Company files a registration statement and thereupon shall, as expeditiously as possible after such 60-day notice period, use its best efforts to effect the registration under the Securities Act and under all applicable state securities laws of:


(a) all Registrable Securities which the Company has been requested to register pursuant to the Request for Registration; and


(b) all other Registrable Securities which Holders have, within 20 days after the Company has given such notice, requested the Company to register;


all to the extent requisite to permit the sale or other disposition by the Holders so to be registered. If the Holders who requested the registration of Registrable Securities engage one or more underwriters to distribute such Registrable Securities, the Company shall permit the managing underwriter(s) and counsel to the underwriter(s) at the Company's expense to visit and inspect any of the properties of the Company, examine its books, take copies and extracts therefrom and discuss the affairs, finances and accounts of the Company with its officers, employees and public accountants (and by this provision the Company hereby authorizes said accountants to discuss with such underwriter(s) and such counsel its affairs, finances and accounts), at reasonable times and upon reasonable notice, with or without a representative of the Company being present. The Company shall have the right to include in any registration of Registrable Securities required pursuant to this Section 6.2 additional shares of its Common Stock ("Company Securities") or shares of Common Stock that have the benefit of duly exercised registration rights contractually binding on the Company ("Third Party Registrable Securities"), provided that if any Registrable
-------- Securities to be so registered for sale are to be distributed by or through underwriters, then all Registrable Securities to be so registered for sale, Company Securities and Third Party Registrable Securities, if any, shall be included in such underwriting on the same terms and provided, further that if,
-------- ------- in the written opinion of the managing underwriter(s) the total amount of such securities to be registered will exceed the maximum amount of the Company's securities which can be marketed (i) at a price reasonably related to their then current market value, or (ii) without otherwise materially and adversely affecting the entire offering, then the Company shall exclude from such underwriting (x) first, the maximum number of Company Securities and Third Party Registrable Securities as is necessary in the opinion of the managing underwriter(s) to reduce the size of the offering and (y) then, the minimum number of Registrable Securities, pro rata to the extent practicable, on the
--- ---- basis of the number of Registrable Securities requested to be registered among the participating Holders, as is necessary to reduce the size of the offering. (A registration that covers both Registrable Securities and Company Securities or Third Party Registrable Securities shall be deemed to have been requested pursuant to a Request for Registration if the Registrable Securities constitute at least 50% of the total offering on the effective date of the registration statement but shall not be deemed to be one of the four registrations referred to in Section 6.1 hereof if the Registrable Securities constitute less than 50% of the total offering on the effective date of the registration statement.)


6.3 "Piggyback" Registrations. (a) If the Company at any time proposes
------------------------ other than in accordance with a Request f ...